Does the Healthsource Chiropractic owner personally guarantee the Franchise Agreement even after a transfer?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
sation owed to, and the travel and living expenses (if the Initial Training program is not held virtually in the future, and including all transportation costs, room, board and meals) incurred by, the attendees who attend the Initial Training program;
- d. if your lease for the Premises requires it, the lessor must have consented to the assignment of the lease of the Premises to the Proposed New Owner;
- e. you must pay us a non-refundable Transfer fee in the amount of $10,000.00 concurrently with the execution of the Transfer Agreement, described in Section 14.5f below, and you must reimburse us for any reasonable expenses incurred by us in investigating and processing any Proposed New Owner where the Transfer is not consummated for any reason;
- f. you and your Principal Owners must execute
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
The 2025 Healthsource Chiropractic Franchise Disclosure Document outlines the conditions for transferring a franchise, but it does not explicitly state whether the original owner's personal guarantee extends beyond the transfer. However, the document does state that as part of the transfer agreement, the original owners must provide a general release of any claims against Healthsource Chiropractic. Additionally, they must acknowledge that the restrictive covenants in Article 9 of the agreement will survive the transfer.
To transfer a Healthsource Chiropractic franchise, several conditions must be met. The franchisee must apply for approval, and the proposed new owner must also apply for acceptance as a franchisee. The current franchisee must be in full compliance with the agreement, both financially and otherwise. The proposed new owner must meet Healthsource Chiropractic's standards for franchisees and have sufficient business experience and financial resources.
Before the transfer can be completed, the current franchisee must pay any outstanding amounts owed to Healthsource Chiropractic and its affiliates, including franchise fees and advertising fees. The proposed new owner's directors must complete the initial training program. A non-refundable transfer fee of $10,000.00 is required, and the franchisee must reimburse Healthsource Chiropractic for any expenses incurred in investigating the proposed new owner, even if the transfer is not completed. The franchisee and their principal owners must execute a Transfer Agreement that includes a general release of claims against Healthsource Chiropractic.
Given the lack of explicit information about the personal guarantee's survival after transfer in the FDD, prospective franchisees should directly ask Healthsource Chiropractic whether the personal guarantee extends beyond the transfer of ownership. Understanding this aspect is crucial for assessing the long-term liabilities and responsibilities associated with the franchise agreement.